Dynamics of the LNG Industry

Dynamics of the  LNG Industry
Dynamics of the  LNG Industry
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Total Training Hours : 10-14 Hours
Training Duration      : 2 Days
Total Training  Days  : 1-2 Working Days
Weekdays (Sunday to Thursday)
Regular Sessions : 4 – 6 Hrs Per day (9am to 2pm or 3.00pm to 9.00 pm)
Food & refreshments Included
Weekends (Friday & Saturday)
Fast Track Sessions: 8 Hours per day (9am to 5pm)
Food & refreshments Included
Globally recognized certificate from “Kings Global Career Academy”
Hard & Soft Copies of Study Material
1. Email
2. Social Media (For Emergency requirements)
1. Passport Copy
2. Curriculum Vitae
3. Passport size photographs
4. Course Fee
Cash / Cheque / Credit Card / Bank Transfer.
  • New or recent LNG traders
  • Staff with the responsibility to establish or consolidate recently established LNG trading businesses
  • Gas buyers seeking to optimize their supply position and manage seasonal demand variations
  • Staff from well-established trading entities but do not have a strong background in LNG trading
  • Line managers who are seeking to better integrate LNG trading into their business units, or who are considering setting up an LNG trading business
  • Support professionals, including from professional service firms, who are seeking to better understand LNG trading
  • Government officials involved in oversight of companies that trade LNG
  • Shipping companies and terminal operators that need to understand the short-term business
  • Provide a conceptual framework to understand LNG trading and to participate effectively in developing an LNG trading business
  • Provide practical tips, tools and tactics to devise and execute sound LNG trading strategies
  • Build an understanding of the commercial, operational and logistical aspects of LNG trading, how they interact, and how successful traders manage that interaction
  • Help attendees bridge between the course materials and their specific jobs and business requirements, with the immediate payoff to their careers and sponsoring organizations
  • Give attendees direct, in-depth exposure to leading experts who have worked in a variety of roles across the extended LNG value chain
  • Provide hands-on exposure and real-life experience through case studies, exercises, and TwoTwoFive’s unique computer-based LNG simulations
The Context: Why Trade?
  • Dynamic global Natural Gas and LNG market
  • Industry unbundling and growth of liquidity
  • An increasing number of import terminals
  • Growth and diversity of LNG fleet
  • Diverse world gas price indices
  • Portfolio players, traders, end-users
  • Margin gains from shipping and price arbitrage
  • Roles and functions in the broader LNG trading team
Mechanics of Trading
  • How is trade facilitated
  • Trading terminology
  • Market structure
LNG Trading in Asia
  • Asian gas market overview
  • How LNG is traded in Asia
  • Major prices indices and key drivers
  • The future development of the Asian gas market
LNG Trading in the Atlantic Basin
  • European gas market overview
  • Major price indices
  • How gas is traded in Europe
  • North America gas market overview
  • How gas is traded in North America
Case Study: Panama Canal
Trading Gas Prices – Flat price Simulation
  • Introduction to the IGNITE simulation model
  • Interpret news items and form a market view on a flat price
  • Execute futures trades to go long or short gas flat price
  • Manage trades within limits and generate P&L
LNG Trading Opportunities I
  • Arbitrage
  • Fixed vs Floating price
  • Tenders
  • LNG Swaps
LNG Trading Opportunities II
  • Reloads
  • Sleeving
  • Floating storage
  • Real options trading: the NW Europe backstop
Case Study: Reloads
LNG Negotiation Simulation
  • Portfolio of short and long positions
  • Negotiate with other teams to cover portfolio exposure
  • Calculation of potential freight
  • Ensure executed cargoes are matched appropriately
How to Plan an Optimal LNG Supply Portfolio
  • Development of LNG Master Sales Agreements
  • Contract optionality
  • LNG liquefaction tolling
  • Short term LNG supply and demand tenders
  • Spot cargo trading
  • Managing LNG/gas quality issues
Optimisation of LNG Storage and Shipping
  • Terminal use agreements
  • LNG loading constraints and procedures
  • Loading and unloading window and penalties
  • Role of storage and shipping
  • Summary of shipping costs
  • The long-term LNG ship charter market
  • The spot and short-term ship charter market
  • LNG boil-off, cool down issues and LNG heel
  • Voyage optimisation
  • Swaps and a shipping optimisation tool
Exercise: Shipping
  • Calculate cost of chartering for a WAF to Japan voyage
Practicalities and Procedures of LNG Trading
  • Term sheet structure and key features
  • Key features of LNG SPA’s and MSA’s
  • Credit requirements
  • LNG charter parties
  • Parcel sizes and safe loading ranges for ship tanks
  • Ship vetting and terminal clearance process
  • Ship compatibility with the terminal
  • Cargo inspection and custody transfer
Risk Management
  • Major risks such as basis risks
  • Reliability, liquidity and transparency of LNG price indexes
  • Title transfer and taxation issues
  • Changing appetites for credit and other risks
  • Risk management tools – futures, swaps, letters of credit
Pricing Risk Management and forward curves
  • Constructing an LNG forward curve
  • Managing the risk within an LNG portfolio
  • Optimising risk vs reward
Managing LNG Complexities
  • S- Curves (types and peculiarities)
  • Brent (3;0;1) or (3;2;1) or other formulas for pricing
  • Different types of paper instruments
  • Paper hedging techniques
  • Hedging S-curve structures in LNG contracts
Hedging Simulation
  • Determine price exposure of a given portfolio
  • Hedge position to lock in profit
  • Review exposure change as new deals are executed
  • Unwind hedges as cargoes price in and out on a daily basis
Advanced Trading and Pricing Strategies
  • Portfolio effect
  • Optionality at terminals
  • Contract optionality
  • Floating Storage
  • Diversions
Case Study: Trading at Tangguh
Back Room & Corner Office
  • Integrating trading into the broader organization
  • Policies, processes, tools
  • Oversight & key metrics
Asian and Middle East Physical Simulation
  • Identify price dislocation and arbitrage opportunities
  • Trading LNG cargo differentials and arbitrage
  • Buy and sell FOB and DES cargoes
  • Manage price risk
Current Key Issues and Opportunities
  • Asian market reform
  • LNG hubs
  • Paper trading
  • Development of LNG price indices
  • The long buyers’ market
  • Aggregators vs. traders
Upside Sharing Exercise
  • Calculate the commercial value of two options
  • Determine whether to choose the upside sharing option